November 2016 - c3centricity | c3centricity

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Increasing Impact & Engagement through Advertising Testing

One of the most popular evergreen topics on C3Centricity is advertising testing. Therefore, in light of the exp anding channel options available to marketers today, I think it’s time I proposed an updated perspective.

There are countless posts which discuss how to A/B test a campaign on FaceBook or how to  pre- and post-test advertising. What seems to be lacking is an objective view of IF  you should be testing your advertising at all. So this is what I want to discuss here. I hope you will find it helpful in reviewing your own opinions concerning advertising testing. 

 

Should You Test Advertising?

If you work on the client side and ask your colleagues in an advertising agency, most of them would probably scream NO! That’s not very surprising. Countless teams have suffered at the h ands of market research and the over-zealous testing of their creative – in a usually very uncreative way.

There have been many attempts at defining metrics to evaluate advertising. One of the biggest challenges from my perspective is whether or not you should test a campaign or each individual ad separately. But more on that in a moment. First I want to review the actual decision to test.

Should you test an ad built to increase awareness in the same way as one built for encouraging trial, purchase, repurchase, loyalty or advocacy? My answer would be a very Swiss “It depends”.

Firstly you have to be clear about why you are advertising in the first place; what your campaign is trying to achieve, its objectives.

It still amazes me how many companies develop a new campaign simply because that’s what they do each year. Hopefully, each new campaign has a link to the preceding one, but even that is not always obvious.

Therefore start by identifying with whom you want to communicate and why. And share this information with your ad agency; it’s surprising how many clients don’t! Remember to give as complete a description as possible of your target audience, including the who, what, where and why. (Our 4W™ Template is great for storing all the information in a one-pager)

 

When to Test Advertising

Many companies have a st andard process of testing ads before they can be aired. This is usually referred to as copy-testing. An ad must appear in the “top quadrant” on both impact and persuasion before it can be used. While this is admirable for its thoroughness, it often results in multiple ads being developed, to ensure that at least one of them meets these criteria. The feeling is that more is better. If you test two, three or more ads, you can then hope for a “winner.” What’s wrong with that?

Well, in my opinion, quite a lot.

You’ve just wasted a lot of time, money and energy in developing multiple ads, when you know you’ll most probably only use one. Of course, your advertising agency won’t tell you to stop this practice, as they’re getting more work than you really need.

It’s time to think differently about ad testing and spend your valuable resources more wisely. (>>Tweet this<<) 

Once the ad agency has developed a number of campaign concepts or ideas that meet your carefully defined objectives, then that is a much more efficient time to test. OK, so the ads are likely to be in storyboard format or sketches, but most people will underst and the message you are trying to convey – if it’s effective of course.

Don’t wait until you have gone further in the production and created animations, final prints or even complete films before testing. (>>Tweet this<<) That’s just a waste of resources.

If you wait until that later stage in the development process, you are also more likely to designate one “winner” when in fact they could all be good – or bad!

Working with concepts will help you identify the real winning ideas, which can then be developed into a final version or two for copy testing – if you must, but more about that in a moment.

The earlier you test, the more resources your ad agency can then concentrate on the most relevant concept(s), rather than diluting their efforts to give you the wide choice requested. No wonder ad agencies don’t like copy testing!

 

What to Test in Advertising

Another reason for testing concepts rather than finished ads, is to ensure that they can be turned into a campaign.

I have witnessed many so-called “Big Ideas” that were superb as they stood, but which were impossible to visualise other than in the single version proposed.

If you show your early work to consumers, they might be inspired by the idea and suggest other related situations or portrayals. You will then have an indication of the campaignability of your idea.

For regional and global campaigns, there is often the added complication of the translation of the idea into multiple languages.

There are many concepts in English that don’t or only poorly translate into other languages.

English is a wonderful language that is particularly suited to advertising. It provides many opportunities for word plays, idioms, acronyms, slang, compound words and other wonders of its grammar.

In addition, English is known for its extensive vocabulary, which is especially useful in advertising copy-writing. Whereas in another language you might only have one or two words to express a particular meaning, English may have five or six, each with subtle differences.

If you’d like to see some great examples of advertising messages “lost in translation” check out this fun article from Business News Daily, or this one from The Balance. They’ll both have you laughing out loud!

 

How to Test Advertising

Depending upon their “st andard” process, many companies will tend to use the same pre-testing method and evaluation, with no regard for the campaign’s objectives.

As previously mentioned, some clients I know must score in the “top quadrant” on the usual copy testing impact and persuasion metrics before their ad can be aired. However, there are valid reasons to accept lower scores on one or other of the metrics, depending upon the campaign’s objectives.

For instance, if the campaign’s objective is awareness, then a lower persuasion score may be acceptable. Likewise, if you are looking for your customer to take action, then a lower score on impact may be acceptable if the ad scores high on persuasion.

Some of the best – and most useful – campaign testing I have ever seen, was done qualitatively. But that alone won’t work unless you then allow the creatives, market research and insight groups to discuss the results together – ALONE!

In my experiences of this, it was exciting to share consumer opinions directly with the creatives. They too found it stimulating to share their ideas and get feedback based on real consumer input. Whoever said that creatives don’t like testing are wrong; they just dislike judgemental, sometimes disrespectful and bl and numerical results with little if any depth of analysis.

In “Copy Testing: A Confident Path Toward Mediocrity,” Tom Bick, named one of the top digital marketers of 2014 by Ad Age, claimed that copy testing tends to penalise forward-thinking marketers. He argues that the average person will default to comparing a new ad with those they’ve already seen. In other words, they will err on the side of less creative campaigns. You can read more on this in the excellent Big Commerce article and-is-it-effective-for-present-day-marketing-campaigns/” target=”_blank”>HERE.

 

A Unique Alternative to Copy Testing

One solution that I propose to my clients is a unique and powerful testing methodology developed by PhaseOne. Their scientifically based, proprietary technique, is based on over thirty years experience of academic work  and real-world validation. Their knowledge base includes an extensive foundation based upon analytics in human behaviour, anthropology, culture traits, entertainment, education, communications and marketing.

This enables them to accurately explain how your target will react to your messages and even more importantly the reasons why, without actually speaking with consumers. This can be particularly useful for testing ad ideas for new product concepts.

In comparisons with st andard copy tests, PhaseOne’s technique has been shown to give similar outcomes, but with a greater depth of underst anding. More importantly, it provides a clear explanation of the reasons why consumers react to an ad as they do. This makes it far easier to improve the ad, whether by cutting out sections – which saves money – or improving the explanation of benefits. If you’d like to hear more about this unique methodology, especially if you’re having trouble speaking with your own target customers due to legal or confidentiality issues, I’d be happy to share some case studies. Just drop me a line HERE.

 

The Six Rules of Advertising Testing

In summary when it comes to testing your advertising:

  1. Know with whom you want to communicate.
  2. Know what your target audience wants to hear.
  3. Know why you are communicating, what the message is that you want to send.
  4. Know which concept(s) or ideas have the most resonance with both your target audience and objectives, and why.
  5. Know how the concept(s) will develop into a campaign across media.
  6. Know how you are going to communicate, the most relevant medium and channels for your target audience.

Do you abide by these six rules before pre-testing your own ads? If so, well done; if not, perhaps it’s time to review your own process.

 

The Future of Advertising Testing

In conclusion, let me finish with a few words about the future of pre-testing. Although advertising testing supposedly started in the mid-1800’s, it wasn’t until the 1950’s that performance metrics became the holy grail of clients, ad agencies and media sellers alike.

From Day-After-Recall, to Persuasion, and from Br and linkage to Moment-by-Moment systems, it wasn’t until recently that the importance of emotional rather than rational responses to advertising gained support.

Today, emotional analysis has become widely available. Customers’ reactions to the ads are measured, usually on the six universal emotions (happiness, sadness, surprise, fear, disgust, anger) plus neutral. While it’s still early days in underst anding the connection between emotional reactions and br and impact, things are definitely moving fast.

 

Digital and Traditional Media

Interestingly, when I was doing research for the original post on this topic a couple of years ago, almost all the articles I found were about the testing of online advertising, comparing PPC (Pay Per Click) and the positioning of paid, earned and owned media.

However, around two-thirds of budgets were still being spent on traditional media – at least in 2014 –  and Statista showed that consumers still trusted it more than new media.

A more  recent post on MarketingCharts still shows traditional media leading the ideal channel mix for marketers – but for how much longer?

Spend on digital is increasing more rapidly than was at first expected. In the US, the UK and China online is expected to surpass TV next year. Both and-traditional-media-advertising-outlook-2016-2020-68214/” target=”_blank”>MarketingCharts and eMarketer have made similar predictions for many markets in just the past couple of months.

I have covered primarily pre-testing here, yet I know many companies who are satisfied with running only post-tests. They admit that it is because they never have enough time to pre-test their ads. At least to me, this highlights a clear lack of concept testing in the first place. If you are one of these organisations, then this post has hopefully persuaded you that there is a better way.

Pre-testing is important, no vital, for clients, media and ad agencies alike, to do more of. At least doing early assessments will provide material for those development discussions – before it’s too late!

Do you agree? Do you have a different approach to advertising testing? If so, please share your ideas below.

C3Centricity used an image from Denyse’s book “Winning Customer Centricity: Putting Customers at the Heart of your Business – One Day at a Time

This post is an updated version of the one first published on C3Centricity in 2014.

Improving Ideation, Insight & Innovation: How to Prevent Further Costly Failures.

If you prefer to listen to the PODCAST of this post, click HERE. Don’t forget to subscribe on iTunes too!

As you know, I am a global customer centricity champion. My passion is helping organisations to grow faster by putting customers at the heart of their business. One of the most frequent requests I get is to help in improving ideation and innovation.

This is by far the most common area that my clients struggle with. Is it a challenge for you too?

Many companies create great new products and services – from their perspective – but they fail! They then ask if I can help them to identify to whom they should be selling. Of course, I do help them, but I also suggest that next time it would be better if they called me before they started innovating! In a failure situation, it is almost always due to an outdated innovation process in which the customer has not been involved.

I know it can be difficult to innovate in this new age of technology, but it remains vital for growth. This is why I was recently invited to run two workshops on improving ideation and innovation, as well as to speak about it at three different universities in Beijing and Shanghai.

China is an Innovation Hot-House

China joined the top 25 most innovative countries in the WIPO global innovation index for the first time this year. This is because they no longer rely on cost-effective manufacturing alone. They also applied for more patents than the next two countries, the United States and Japan, combined! This clearly shows that China is improving ideation as well as their innovation. But they know they must do even more. To become a truly competitive nation, they have to better understand their customers, especially their growing middle and higher-income residents, who continue to prefer primarily imported Western brands.

Let me share with you a few of the ideas that I spoke about during my visit. They may just save you too from more costly failures.

Innovation is Essential

Switzerland continues to lead the world in innovation according to the latest WIPO GII study. It was, therefore, a privilege for me to by invited to help China corporations and academics by proposing a new way to innovate.

Most companies innovate from a technical and skills-based foundation. It doesn’t usually work very well, if at all. In fact, according to Nielsen, IRI, Fortune and many others, it is estimated that between 85% and 95% of new consumer products in the US fail. In Europe, it’s just as bad, with only 25% of new consumer products still on the shelf just twelve months after launch! And less than half that number by the end of the second year.

With such disastrous results, you might wonder why companies continue to innovate. Well there are three main reasons why they do:

  1. It keeps brands fresh. Brands which innovate have something new to share with current and potential clients. We have come to expect it. What excites today, is normal tomorrow and then just boring after that. We have gotten accustomed to regular updates and constant new choices.
  2. It encourages switching. If brands and options remain the same, people would only switch if they became dissatisfied and the cost of switching was low. Since product performances are so similar in many categories today, new variants and offers suggest differentiation. The brand appears more vibrant and people like that.
  3. It revives brands through excitement and buzz. In today’s connected world, this is vital. People learn about brands as much from friends and family as through advertising. And they trust the former more than the latter, even if some of these “friends” are virtual ones they’ve never met. According to Nielsen’s report ” Global Trust in Advertising” more than eight-in-10 global respondents (83%) say they trust the recommendations of friends and family, and two-thirds (66%) others’ opinions posted online.

 

NPD Funnel copyRenovate your Innovation Process

It still surprises me that companies continue to use their same innovation process when their failure rate is so high. It often looks something like the diagram on the right. Is that what yours looks like? In fact, is your process a funnel? If so, then you are facing at least two problems:

1. That it is a funnel. This process is linear, with a beginning and an end. It assumes that there is only one “winner” from all the ideation and brainstorming. And it also supposes that only one concept developed from that “winning” idea will succeed.

But what if all your ideas are great? You would be throwing away all but one of them! Or suppose that they are all “losers” and you launch the least “awful” amongst them? There must be a better way, no?

Even IDEO’s iterative process still assumes “winners”, because they quickly move from brainstorming to prototyping and testing with customers. At least they do suggest co-creating with customers which is a positive element of their process and it is great fun to do – from my own experiences.

 

2. That it doesn’t include the customer. How can you have any chance of innovating for your customers if you don’t include them? You are relying on your own perspective to make choices. Are you the typical consumer for whom you are innovating? Probably not. In which case, why are you taking decisions based on your opinion? It’s pretty irrelevant!

Virtuous circle of better innovationThe second diagram on the right is the type of NPD process that I encourage my clients to use. It is, of course, adapted to their specific needs, based upon their current process. By doing this, it makes adoption of the new process much easier, by quickly getting everyone to support the needed changes.

The major difference from most current innovation processes is that it is a virtuous circle. It starts and ends with opportunity identification, in other words with the customer and insight. This, of course, means that we must know and understand our customers deeply.

Know your Target Audience Intimately

We all think we know our customers, but this is often not totally true. Not deeply enough anyway. One of the quickest roads to improving ideation and innovation is to know for whom you are innovating. (>>Tweet this<<)

The first thing I ask my clients to complete is the 4W™ Template of the “who”, “what”, where” and “why” of their target audience. Often times they struggle with the last “w”. If you want to try it yourself, check our post “How well do you know your customers?”

Even with the template filled, you still have to go further. Optimal understanding comes from regular connection. Our customers are changing – fast, so we need to keep our finger on the pulse of the market. Yesterday’s information is no use to manage today’s brands or innovate for tomorrow.

During my talk at Shanghai’s ECUST, someone asked how we can be better prepared for the future. I loved the question, as it enabled me to speak about another of my passions, that of scenario planning.

Change happens, and especially rapidly in China. My recommendation to the student was to not rely on trends alone. They are uncompetitive. To gain an advantage over the competition, you need to develop them into plausible future scenarios. If you are interested in learning more, then do check out our post “10 Steps & 5 Success Factors to Ensure your Business is Ready for Anything“.

Knowing why your customers do what they do, buy what they buy and consume what they consume, and then watching and listening to them, will put you in the best possible position for improving ideation and innovation. But there’s still more you can do.

Increase your External Partnerships

As mentioned above, many companies still rely on their own technology and skills to innovate. However, while technology can certainly help deliver improved benefits, it is unusual to be sufficient. In many areas, companies need to collaborate with others who are more specialised in certain areas.

Joint ventures and partnerships are useful for developing new products and services more quickly. You don’t need to build the needed skills internally and you can rely on the immediate support of external experts. Whether you team up with another corporation or a university is up to you, as long as you recognise the support you need. If you rely totally on your internal knowledge for improving ideation and innovation, you are unlikely to find those breakthrough ideas most companies are searching for.

There are many examples of large consumer goods companies partnering with external experts. The Laboratoires Innéov was a joint venture in nutritional cosmetics between L’Oréal and Nestlé, although the relationship ended in 2015. Nestle also created  Cereal Partners Worldwide as a joint venture with General Mills and Beverage Partners Worldwide with Coca-Cola.

Procter & Gamble and >Teva Pharmaceutical Industries announced the creation of a joint venture in consumer healthcare in 2011. The newly named PGT Healthcare partnership with president Tom Finn has since negotiated tens of JV’s, partnerships and strategic alliances.

Expand your Business Model

Another external lever from which more and more companies are benefitting today is a change in their business model. Take the food industry. It is moving more into health and wellness and could become a direct competitor to the pharmaceutical industry as it develops more nutraceuticals.

Pharma, on the other hand, is moving from sickness to wellness, from treatments to prevention.

Or what about telecoms? They now make almost as much money selling geo-localisation data as they do from providing communication services.

Or how about Google moving into cars, solar panels and most recently travel with its Trips App? Through the analysis of their customers’ searches, Google can identify those of us who are looking to travel, those interested in buying a new car or in using taxi services. Google knows more about us today than we know ourselves. And that is both exciting and frightening.

Work with Emotional Benefits, not just Functional Ones

Companies which succeed at innovation know that it is the emotional benefits of their product or service that matters, often more so than the functional ones. (>>Tweet this<<)

Apple used to be a great innovator. In the past few years, I feel they have been relying too much on their technical expertise. The recent launch of the iPhone 7 and the new Mac Book Pro were both less successful than their previous launches. While neither are true flops, they failed to ignite excitement in their potential customers.

There have been numerous posts on why Apple is failing at innovating today. One article in the HBR by Steve Blank stated that both Steve Jobs and Bill Gates “… suggested execution executives as their successors. They confused world-class execution with the passion for product and customers, and market insight. Yet history has shown us that these two talents are not the same. For long-term survival in markets that change rapidly, one is far more important than the other.”

Another article in Business Insider by Julie Bort concludes by saying “Microsoft is now officially more innovative than Apple” based upon Tweets of the events. But Microsoft too failed when Bill Gates handed the company leadership over to Steve Ballmer. For 14 years Ballmer successfully ran the business from a financial perspective. He tripled sales and doubled profits. But he didn’t set the company up for long-term survival. In early 2014, Satya Nadella took over and made some radical changes which focused the company on mobile and the cloud (Azure). This freed Microsoft to become more innovative again and the result is already showing.

You can never go wrong if you start from your customers’ perspective and connect emotionally with them. (>>Tweet this<<)

Develop Insight as a Company; Don’t Leave it to Market Research Alone

Some managers think that insight is just another word for market research. They’re wrong, but perhaps you too see it in this way?

Market research is a great source of information, but for insight, you have to integrate multiple sources of information. It is rare for a single project to provide a deep insight. This comes from truly understanding the customer and that takes time. It takes data and information, turned into knowledge and then understanding.

Insight ProcessKnowing is also insufficient unless you understand what it all means to the customer.

The full development process, such as the example given on the right, takes time and people, ideally with differing perspectives. It takes a detailed understanding of the target audience, their needs and desires so that you can resonate emotionally with them.

Many organisations work with human truths to help in identifying a concept that will resonate emotionally. These are usually based on basic human needs, which cut across cultures. This makes them particularly useful for regional and global brands.

During my different talks, I gave many examples, but one which my audiences found particularly fascinating was the insight both Unilever’s Omo and Nestle’s Nido are using. The insight is based on the human truth that “All parents want their children to grow up happy and healthy”. The insight they then developed, which is relevant for both washing powder and infant formula is “I want my child to experience everything life has to offer, even if it means getting dirty”. What is particularly interesting in this example is that both companies have been able to use the same human truth and insight but make it relevant for each of their categories.

My recommendation, therefore, if you are struggling to develop insight, is to analyse your competitors or the brands targeting a similar audience. If you can identify on what human truth and insight their message is based, you may be able to use it too.

Conclusions

These are just a few of the many ideas which I shared with enthusiastic audiences wherever I went in China. It is clear that both entrepreneurs and corporate executives in the country are keen to improve their innovation. They are also thirsty for support in further improving their ideation. For this reason, I believe they will continue to top the nations in patent applications for many years to come. Therefore, it is vital that we supposed ” developed” nations support our entrepreneurs and creative executives to stay in the race. Unless we do so, we could see China dominate new products and services as they have dominated manufacturing in the past.

What do you think? I would love to hear your thoughts on the race for innovation. 

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